Hindsight bias is a fallacy where people feel they knew how things would turn out after the events occurred. Take yourself back to December 2019. A new decade is about to start. Who was expecting a pandemic that’d keep us under lockdown and change how we live for years? Who was expecting a war in…
Articles
Goodhart’s Law: Soviet Nail Factories & The Power of Incentives
The Soviet Union had a shortage of nails during Lenin’s time. To increase production, his government started giving bonuses to the factories for the number of nails they produce. After hearing about the bonus, the factories reduced the size of the nails to produce as many nails as possible. In the end, they met the targets and…
10x instead of 10% – Exponential Thinking
10% faster, 15% more, 5% less… Our brains think incrementally by default. That’s why many people focus on making things slightly better. You can see it every day. Hiring 10 more employees, spending $10k more on ads, opening one more shop… And the best-case scenario, they get what they planned for: an incremental improvement. But…
Parkinson’s Law Meaning, Examples, and How to Overcome It
Parkinson’s Law means that work expands to fill the time available for its completion. Imagine you have two weeks to complete a project. How likely would you deliver the task earlier than the deadline? If your answer is not likely, you’re not alone. Because even if the project with a two-week deadline could be finished in three…
Concorde Fallacy: How to Avoid Making Decisions Like A Losing Gambler
The Concorde fallacy is a mental bias where people continue spending resources (money, time, or effort) on failing projects because of a prior commitment. Let’s see the story of Concorde and how a fallacy was named after it. Concorde was an impressive aircraft. It had an elegant design, with a maximum speed over twice the…
What Is Argumentum Ad Populum (And How To Question It)
Argumentum ad populum (Latin for “appeal to the people”) is a fallacy when people accept what is popular as true without logical reasoning. We live in a world of arguments. Some arguments shape how we make decisions and how we live without us realizing it. Especially when the majority accepts one as the norm. A…
The Lindy Effect: How Things Age In Reverse (With Examples)
What is the Lindy Effect? According to the Lindy Effect, the older an idea, a technology or a company gets, the longer it will live in the future. It’s aging in reverse. And it’s a useful mental model to understand the world better. Imagine you are in a library. You see hundreds of books one next to…
What is Antifragility (With A Career Example)
What’s the definition of Antifragility? We know fragile things. They break easily with a little stress and disorder. Antifragile things don’t just resist a shock, damage, or crisis but also thrive under these conditions. It’s a concept developed by Nassim Taleb in his book Antifragile. Let’s look at two examples to see how you can use it in your life: Fragile: Little…
Second-Order Thinking: How To Make Better Decisions In Life
Second-order thinking is a useful mental model to make better decisions in life. First, a story from China will show you why it’s crucial to use second-order thinking for major decisions. Then, you’ll find practical tips on how to apply second-order thinking. Every decision has consequences When Mao Zedong declared war on sparrows with Four Pest Campaign in China,…
